Over five million mortgage holders do not know what rate of interest they are currently paying on their mortgage, research has found.
Women are far worse culprits, with more than one in three (36%) unaware of their rate, compared to one in five (20%) for men, according to a survey by mortgage site impartial.co.uk.
The findings come as a big surprise, given that mortgage woes have been a key worry for many homeowners in the last year.
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Need to make informed decision
“With the effects of the credit crunch increasing and homeowners tightening their purse strings, it has never been more important for mortgage holders to know exactly what rate of interest they are paying,” says Impartial marketing director Karen Barrett.
“Without knowing their monthly outgoings, homeowners are unable to monitor their finances and make crucial decisions in this pressured economic climate.
“Getting the best mortgage advice in the current environment is vital, as many people can easily find themselves in a difficult situation financially. With deals constantly changing, homeowners need to feel confident with their decisions,” concludes Barrett.
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Sever market pessimism
Unsurprisingly, the Impartial survey also highlighted a strong sense of negativity amongst existing homeowners, with almost half (45%) of respondents saying they are pessimistic about the prospect of refinancing their property. Less than a third (31%) claim to feel positive about re-mortgaging their property.
If you want to find yourself a more competitive mortgage, but find the whole process a bit daunting, you may want to consider using a mortgage broker.
While it may seem strange to go through a “middle man” in search of a cheaper deal, brokers can beneficial for a number of reasons.
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Reason #1: Too much information
The curse of the internet age is too much data. At any one time there are thousands of different mortgage offers available, and information about all of them is available on the web. But you have to be extremely sad to think it worthwhile to trawl through even a fraction of those offers in search of the ideal loan. Far better to use a broker who constantly sifts that data and has a short-list of the top offers in every category.
Reason #2: Not enough information
Most data sources don’t in fact give you enough information to make an informed choice. When choosing a mortgage you need to consider not just the interest rate or the term of any introductory discount, but also the arrangement fee, the legal and valuation costs, and the lender’s lending criteria. It’s the whole package that represents good or bad value. A good broker has all that information and can, for example, steer you away from offers where a lender’s criteria might lead to you being rejected.
Reason #3: Grab it while you can
Brokers usually have access to deals that aren’t offered to the public direct, and may also negotiate their own exclusive offers. In the fast-moving mortgage market, many of the best offers are only available for a week or two. You may never even hear about them if you don’t use a broker.
Reason #4: Share the worry
Moving house or changing mortgage is stressful. So let somebody else take their share of the hassle. A broker chases you and everybody else involved until the case completes. That’s a lot less phone calls you need to make.
Reason #5: Don’t pay if you don’t have to
Unless your case is unusual or complex, it won’t require the kind of expertise that justifies paying a fee. The vast majority of mortgage lending is on normal terms and is fairly straightforward to arrange. Only consider using a fee-charging broker if you know your circumstances or the property or both are so unusual that they will present a serious challenge to lenders.
